CIO Straight Talk - Issue 11 - 62

But as embedded sensor technology has become
cheap, reliable, and secure it should be considered
for use in a wide range of manufactured products.
Take the case of a company that installs and
services a product like sprinklers. The company
must employ armies of inspectors to regularly test
them at customer sites, a huge operational cost
that would be eliminated if a company were able
to test them remotely.
As it stands, around 40% to 50% of the installed
base is handled by local service providers, so
seeking out such opportunities for differentiation
should be a priority for larger producers.
Building remote servicing capabilities essentially
raises an invisible fence that prevents outsiders
from servicing the producing firm's product.
Given the availability of sensor technology at
inexpensive cost, the case for making the switch
is overwhelmingly strong.

THE EXECUTIVE REPLIED THAT,
BECAUSE COMPETITORS
WERE A LONG WAY FROM
PRODUCING DIGITALLY
CONNECTED PRODUCTS, SHE
DIDN'T CONSIDER THIS TO BE A
PRESSING ACTION ITEM.

ADOPTION OF EMERGING TECHNOLOGIES
Another area of opportunity involves new
technologies. These include:
Virtual reality. Field service organizations are always
trying to improve their "first-call fix rates," because
failing to solve a customer's problem with a product
on the first visit is a major cause of low customer
satisfaction and retention rates. Sometimes
the problems result from not having enough
experienced technicians in the field. But with
virtual reality technology, organizations can enable
a technician to consult with a pool of company
experts, wherever they may be, to solve a problem.
This technology can similarly be used in plant
engineering to provide a pool of shared expertise.
Predictive maintenance. Maximizing asset
utilization in order to reduce production costs,
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especially in the case of heavy capital-intensive
manufacturing plants, is the aspiration of every
COO. Many plants today still rely on traditional
preventive maintenance agreements to minimize
machine failures. But the systematic scheduling
of maintenance visits doesn't always reflect
the real-time condition of the machines. And
many companies struggle to keep up with their
PMA schedules, in any case. Manufacturers
should migrate from preventive maintenance
to predictive maintenance, using Internet of
Things and business intelligence technology to
monitor machine condition and predict failures.
Companies that have made the switch have
seen a dramatic drop in unplanned production
outages.
Artificial intelligence. Business intelligence,
or BI, capabilities provide insights into hidden
opportunities for value generation. While many
organizations have not invested enough to
build these capabilities (most enterprises use
their data warehouse for operational reporting),
even those that have invested often do not get
enough value due to the lack of an analytical
mindset in the organization. AI and machine
learning can solve this problem by identifying
opportunities automatically and systematically
taking the necessary actions.

TECHNOLOGY
ISN'T ENOUGH
Digital innovation usually requires a different
operating model, one in which digital strategy
and organizational alignment must go hand in
hand. And that means that organizational change
must be part of the technology adoption.
CEOs are hiring digital transformation leaders to
push these efforts, in collaboration with the rest
of the senior leadership. Such leaders need to be
both business and technology savvy. CIOs who
have shown the ability to successfully achieve a
high degree of business-IT alignment, and thus
have created a culture of technology innovation
for generating business value, are ideal
candidates for such roles. They are well suited
to prepare the technology ecosystem to deal
with challenges like fragmentation, data quality,
and inflexible legacy platforms. However, in
CIO Straight Talk - Issue 11

Table of Contents for the Digital Edition of CIO Straight Talk - Issue 11
